Skip to main content

tv   Fast Money Halftime Report  CNBC  October 14, 2013 12:00pm-1:01pm EDT

12:00 pm
people over the weekend, as well. up and down -- whether here on the floor or running some banks, as they see it the same way. >> we'll see what happens this afternoon. again, meeting between the president, vice president and congressional leaders happens 3:00 eastern time. in the meantime, back to headquarters. scott wapner and the halftime. >> what we're following now on the half. dissing the dollar what china's tough talk about the u.s. means to your money and how to trade the rising rhetoric. box top is netflix's reported plan to conquer your living room to keep the stock on the record run? our top story, no deal, day 14 of the shutdown with the markets showing only a touch of optimism on display at the end of last week. stocks way off their lows. but the deadline gets closer, is it safe to bet on a resolution? it is "halftime". right to john harwood with the latest. the stock market, as i said, coming way off the lows in
12:01 pm
anticipation perhaps of the meeting later in the day between the president and congressional leaders. >> reporter: there's no deal but they are closing the gap. i've been speaking with aides to harry reid and mitch mcconnell. let me bring you up to date on what their offers are. what harry reid is seek in his talks with mitch mcconnell are a two-month extension of government funding to reopen the government that would allow democrats then to renegotiate changes to the sequester levels. he wants a six-month rise in the debt ceiling to ease potential crisis. mitch mcconnell wants a shorter debt ceiling increase, he wants that for three months. and he want is alonger continuing resolution to reopen the government because it would allow republicans to keep the sequester levels lower. there may be a delay in the medical device tax, stronger income verification steps for participants in the exchanges who would be eligible for subsidy. but democrats are saying they
12:02 pm
would have to be offset by concessions by republicans, maybe tax loophole closings. and on the question of the vitter amendment which some republicans have talked about, which would change the terms under which members of congress and their staffs could participate in the exchanges, democrats say they're not going to get a vote on that. but the aide described it a few minutes ago, scott, as we're circling the runway on a deal. it could happen -- come together later this afternoon. they have that meeting, of course. with expedited procedures you could have a vote in the senate in the next 24 hours, that early potentially. the question would be, does the house take it? >> thanks so much. we'll follow developments out of the nation's capital. the meeting between the president and congressional leadership, has the major market averages well off their lows of the day. nasdaq going positive. josh brown, how should one be playing this now? >> i'll answer that question, perhaps unsatisfying way. i don't think one should be
12:03 pm
playing because it's a head line by headline market. last week, no deal, all of a sudden they're going to have a meeting one day, 2% rally in the s&p. then you get follow through on friday even though we're told, hey, forget about the meeting, it's just a casual discussion amongst a handful of members. this will go on until a resolution. i'm not sure anyone has an edge on the day-to-day headlines. the market's been resilient and the only takeaway from that, that should be important to you, that is if and when there is a resolution, even if a can kick, like october 2011, market's going to want to buy the news. >> i thought you had an interesting take in your note this morning. you're taking advantage of what you call the extremes, right? selling the rips and buying big dips, fair assessment? >> it is. but even with that, my actist's muted. i can't think of -- look, i don't get it right, i mean the
12:04 pm
best traders are get it right 60% of the time, i'm not one of the best traders out there, but it's difficult when you have a confidence in a management team, in the fundamentals getting the tiling of the stock right. to think i'm going to use aas a major input dysfunction of washington with politicians, that's ludicrous to bet on that. i'm continuing with my philosophy of sticking with core positions, adding what's attractive and weathering the storm. if there are some tremendous buying opportunities like we saw with facebook last week, then i'll add to that trading position. my trading positions are at lowest level they've been in a long time. >> we're not thinking that a resolution in d.c. is baked into anything at this point, right? how much are we talking, you think something like that could be worth to the major averages given what we did last thursday and friday? >> so i think thursday and friday were a result of the wednesday sell-off of 323 dow points. right now the market's holding water. i echo what steve and josh were
12:05 pm
saying o ining i think a resolu d.c. has to be bought. you hear people talking about end of year rally in november and december rally. i'm a little more aggressive in the market now. i see names like international paper, i.p., selling off, i want to buy it. facebook selling off, i want to buy it. micron, very good quarter. >> you wish you did it. >> obviously now in hindsight, i wish i didn't but that's not always right every single time. you get a pullback on a name. if it was a bad quarter and a sell-off you take losses and go home. sell-off on a good quarter you want to take advantage of that. >> what's attractive in the market to you. >> favorite themes that we've talked about, auto, aerospace, like energy names but company-specific energy names. occidental pedestritroleum, i l
12:06 pm
energy very much. technology acts as well. we mentioned the semi cap equip names, land researching, klac, names in na area that are attractive. and oil has come down, right? so i think some of the discretionary names look interesting, especially since they've been lacking recently. >> what are you looking for opportunity? if it does pull back to the point -- >> industrials. >> that's the spot? >> i think you're at a high valuation. the market still within touching distance of all-time highs. so you haven't got than huge buying opportunity to a. cross the board. if i see some names come down, eaten, if i see it come down, i'll buy. if the market stabilizes, i'll buy it. to me there's too much risk on the upside. >> there are margin upside for the industrial companies. so everyone talks about margins peaking, that's one sector where
12:07 pm
you can see an improvement and operating leverage into next year. >> in addition to industrials, there's a huge relative valuation case to be made on energy and basic materials. both of which have perked up recently. all charts look phenomenal. they're two years behind the market in terms of. catching up where they were '08 '08-'09. a possibility of a bigger expansion, those stocks could scream higher. they've been held down for years. >> love the segue, let's bring in dave right now, considered to be one of best financial advisers by barrons in the united states. has been ranged that in maryland for the past three years in a row. welcome, good to see you back. ceo with convergent advisers in maryland. what do you think of the these tis that josh brown put forward a possibility of something big happening in the commodity area,
12:08 pm
energy and the like? >> i agree with it. if you look at the most undervalued area of the market nower at least the u.s., the energy and natural resource base. those are trading at 6 to 8 p/emts with great growth opportunities. it a great place to be right now. >> what leads you there as opposed to more advantageous parts of the market or what have been at least? there i think it's just like he was saying, people have factored in a big global slowdown and we see nice growth. it's a story, you've seen me bullish in the past, emerging markets if you look at countries that are brazil, china, india, those are likely the largest economy in the world in the future and buying at steep discounts now. >> it's josh brown, david. let's stay on emerging markets i think it's an interesting area. starting to see the performance
12:09 pm
level out and now almost outperform the s&p over the last few months, which is something that hasn't happen ford three years. is the world waking up to the fact that these stocks have been serial underperformers for too long? if so, how do you express the trade specifically? using etfs or buying local stocks and currency? >> you're right. the market is waking up to. most countries trading at 10, 11 p/ests and growing at 2, 3 times what the developed world is. the way we're playing those with etfs or managers that are countries specific. you want broad exposure across the board there. >> i don't know what to ask you about first, whether it's the commodities or whether it's the emerging markets. so let's go with emerging markets and india and brazil in particular. brazil, five rate increases, maybe six, this year alone. inflation, it can't get under control. the economy there shows signs of
12:10 pm
weakening, just talking to somebody that came back from brazil on business last week. india, they appear to be dysfunctional. they can't get a grip on their currency. yes, growing at twice the rate, but so is inflation growing at a much higher rate, which limits your real return. why is that an attractive place to be? >> generally speaking, the times when you want to be buying are times when things don't look that great. look at brazil, india, even look at china, you're seeing some levels of growth there, which unloved asset classes, people hate being there now because of the bad news. that's what's creating the opportunity. that's why they're so depressed and that's why they offer the opportunity that they do. >> they're not depressed. they're at an appropriate discount until they get their act straight and we don't he know when it will be. you have to buy when times are worst but they're not at worst, so many people share your view
12:11 pm
of hyper growth. >> it will remain to be seen. they started an uptrend, a cheap asset class. we like that area a lot. >> why do i hear the name valai in my head in do you own valai in. >> we don't buy individual stocks. >> steph -- >> we own valai. >> based on -- you own it for in large part the thesis that he paints. >> it's more china versus brazil but clearly they are brazilian money company. i think that the easy policies in china -- and they haven't been a big splash like the interest rate cuts we've seen elsewhere but we've seen targeted stimulus programs and you're stabling 7, 7. 5% gdp in china. europe, important to china, both are doing beter. brazil you to buy when it doesn't look great. the world cup is going to be interesting. the olympics coming up in brazil, very interesting catalysts.
12:12 pm
and valai we own because they're company-specific things, cost cutting, focusing on profit ability versus massive production. iron ore prices are staying down. >> dave, last word. >> i agree with what she's saying. a great spot to be. i encourage viewers to look outside the u.s., not that the u.s. is a bad place to invest. most opportunities are in emerging markets and developed international space. >> thanks so much. dave zeir. around the desk, you disagree with a large part of that. >> brazil is the per peck time to -- perfect time to buy brazil is now. by the time they come around emerging markets they'll be 15%, 20% higher. >> if you hate minerals and minings and commodities side buy brf, an etf focuses on ba z bran
12:13 pm
plays. it's not a monolithic trade. >> dominic? >> utilities. it's a down day. utility stocks hit hard. worst performing sector in the s&p 500 today. not one stock in that group is up. names like duke energy, douminin resources, the high dividend payers. the sector's whipped up and down a lot. the question for investors remains, are these stocks that should be bought on sale or is the story over for utilities and the dividend paying stock? >> let's ask them. dom, here on the desk? >> it's not over for utility paying stocks, that's a fact. earlier this year, everyone talked about how they were too expensive, too expensive. now, no longer expensive. you're not getting the same growth off a southern company like the s&p. to invest in dividend stocks,
12:14 pm
it's a great time to do it. if that 3% is inadvertising, buy them. >> depends what you think the economy's going to do. if you think the economy's going react sell rate into next year and in addition to the global markets doing better you do not want to be. >> rates go up. >> exactly. >> all of the defensive stocks, taken on gas as we've gotten closer to a settlement, this is the proxy for playing. if you want to hide in the market, if you're a portfolio manager, go to utility stocks. we've seen them get hurt as they go to a taper. >> don't miss cnbc special report tonight at 6:00. right here on cnbc. shares of netflix on fire so far this year. another pop today. big trade coming up? citi reports earnings tomorrow. a few hours to left to trade that. heated debate later on. will they or won't they get a deal in d.c.? the market watching every move.
12:15 pm
if you have to watch it, why not make it entertaining? take the voices of politicians bigging and put them in the mouths of puppets of a playground. the puppets from the cnbc digital workshop. >> i have to say i was disappointed the president refuses to negotiate. >> my friend, john boehner, i repeat, can not take yes for an answer. >> do you like green eggs and ham. >> this isn't some damn game. >> i'm ashamed. i'm embarrassed. all of us should be. >> the president reiterated, one more time, he will not negotiate. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options...
12:16 pm
evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
12:17 pm
12:18 pm
big news around netflix, shares on the move. in talks with cable providers including comcast about including the streaming service as an app on set top boxes. mark mahaney joins us with more from san francisco and what it mean if you own the stock. this i potentially big, yeah? >> could be. we've thought about four major catalysts for the stock embedded in large cable providers as comcast, one of the biggest stock catalysts to come up with. it will not only increase the number of subscribers netflix can get, but reduce it's churn, marketing costs, depends what
12:19 pm
the economics are. hard to see this as not a potentially big win for netflix in. >> you think it happens? >> it's probably. i think negotiations take a long time to play out. we've seen one cable distribution done with netflix and virgin media in europe. we'll see others because netflix is a video utility. i think consumers will demand it. i don't know if it's this quarter but over the next two years. >> some are expecting with time warner cable because they don't have a streaming offering now. is that the best fit in they do something like this. >> for netflix, any fit is a win. they could develop a switzerland arms deal, those two go together, relationship. if bone or two bring it on to their boxes, other companies will be required to do that. >> once they do that -- >> mark. >> i apologize.
12:20 pm
once they join us with a big major cable provider, isn't that the end of the massive growth story for netflix, the multiples start to concontract at that point in. >> possibly. the set up, there's 30 million people in the u.s., 7 million overseas, who subscribe, pay 8 bucks a month to netflix. the bull/bear debate on the stock when the number is 35 million or whether it's 50 million. cable deals make it more likely that number's 50 million. if that happens, those deals break, a few other catalysts hit like price increase, international profit ability, the stock we think can go materially higher, we have an upcase on the stock of 300. >> 330. >> yes. >> how safe is that? >> well, i think the price target's relatively safe. near term, next monday when they report earnings. subgrowth should be intact with expectations, i don't see it as
12:21 pm
a material catalyst one way or another. if there's a move, it's slightly up. if they do cable deals and show international profit ability, we'll see that. we think the stock moves higher off that with potential upside case of 400. >> thinking of an icahn sale? >> i track his statements carefully on netflix. he's been an extremely good buyer of the stock. if he were to sell, and would be a clear negative on the stock. >> what would it mean to shares and the price? >> i think the stock would correct 5% to 7% on the day, my trade. depending right around these levels, that's a reasonable guess on the impact. >> good to talk to you as always. what do we think of buy organize selling this? >>. >> i wish i could buy stocks with this high valuation because to me this is very, very well. but one thing i'd like to though what the deal was with virgin
12:22 pm
media in terms of the satellite companies because with a significant negative for dish, for dtv, if they -- if netflix will be exclusive to the cable companies, that would be a -- >> i think it's a game changer if they make an announcement like this. they have aggressive tar gets, 60 million to 90 million subscribers over medium to long term, if they have a relationship with time warner or a couple of cable companies, if that gets them where they want to be, it lowers content cost, which we've had issues with in figuring out profit ability. >> starting a position at 317 is hard but you brought up icahn. icahn has a position, he's sitting down with tim cook at apple, we know that, we assume he's talking about the dividend. but does somebody pay up for the company. >> the "pops & drops." whirlpool dropping. >> two boy teaque companies talking about sales growth that
12:23 pm
wasn't as aggressive as they've been. i think down 13% in two weeks is interesting. i like replacement cycle story. >> liberty. >> they'll do this interesting thing, spin off home shopping and qvc and value of the media assets can shine. wells fargo likes the plan, took it up to 33 into the 20s if you're into shareholder value unlocking, it's an interesting one. >> micron. >> we talked about buying the stock. too early buying it in front of the earnings. he the position came down to $16.17. it's reversing. it's high for the day now. i think it goes higher still. >> dr. >> the other side of the utility trade. interest rates going up, home builders are going to be at their mercy. keep in mind the bond market's not open today. i suspect yields rise, given how close to an agreement in d.c. >> about 3 of the 5 worst
12:24 pm
performers, home builders. including lennar and dr. represented in our top three trades of the day, that's next. if you're waiting for the next hot ipo you might want to have a seat shutdown could clog the ipo pop line in a big way we've got the warning signs you need to watch for. [ bagpipes and drums playing over ] [ music transitions to rock ]
12:25 pm
make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. get 200 free trades when you open an account. with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. ♪ because what you don't know, can whichurt you.urance. me. what if you didn't know that posting your travel plans online may attract burglars? [woman] off to hawaii! what if you didn't know that as the price of gold rises, so should the coverage on your jewelry?
12:26 pm
[prospector] ahh! what if you didn't know that kitty litter can help you out of a slippery situation? the more you know, the better you can plan for what's ahead. talk to farmers and get smarter about your insurance. ♪ we are farmers bum - pa - dum, bum - bum - bum - bum♪ sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets
12:27 pm
and drive forward with broader possibilities. cme group: how the world advances. >> welcome back. top three trades now. go to the wall. first up, expedia, travel company, worst performing s&p stock. that after a downgrade at deutsche. stock down 7% plus. >> getting hit hard. looks like it's breaking down technically. the analysts at deutsche bank raised major concerns about expedia. with the stock trading at levels it was trading at that's why you see 7.5% correction.
12:28 pm
i wouldn't jump in here because it look likes major damage can be done to this story. >> coach, lower one and a third percent on a down grade. >> concerned about the traffic trends. who isn't concerned about traffic trends in retail? don't think you buy the stock on the next quarter. buy it for the restructuring, new management team. the new ceo ran the international baz and under his leadership they drew revenue 63%. they've got new products, reforemating stores. i any in the low 50s it's interesting with the free cash flow yield of 7%. >> talk chipotle. 443, down a touch, hit all-time high earlier today. >> this is one of the great miracles of the post-crash period. consumer has spoken. they love the company. they will not stop eating lunch there. chart reflects that. two things i want to mention,
12:29 pm
multiple on forward earnings has gotten ahead of what the forward growth expectations are for earnings. what that tells you is that investors are willing to bet more surprises in store. chipotle has repeatedly guided high hoo higher. 30 million shares short, a lot of big-time investors trapped in the name and i don't know how it resolves itself but the market is not making any easier. >> switch gears and talk about the government shutdown. it's having many unintended consequences including possibly delaying ipos. how are you? >> doing well. a lot of people talking about the debt and the ipo market because of the shutdown and that's greatly exaggerated. six deals planning to price this week or next week and bankers i've talked to say there are a handful of investors road show in the works for companies that
12:30 pm
have filed. and other companies looking to go public by the end of the year missed the chance to do so. a few factors at work here. one, the sec open for business. companies able to reach relevant people to get feedback on filings. upside gains and downside risking even with the stalemate, the market isn't moving much. neither is the vix. it hasn't spiked to alarming levels but it's a data point that hasn't become worrisome for companies and bankers. twitter is the deal everybody's watching, looking to launch its road show at end of the month and trade around november 8th. the timetable could get pushed back a week pending market conditions. the. company's negotiating with bankers for a credit line up to 1 billion. terms unclear. the ipo fees around 3.75%, roughly $32 million, split among seven banks. some say that's squeezing banks.
12:31 pm
if you look at data, it shows it's par for the course for deals around 1 billion or so. that's pretty standard. remember, facebook charged bankers or bankers on facebook earned, rather, 1.1% fee, second lowest fee ever so the bigger and more marquee the name, the lower the company can end up paying bankers. 3.75 isn't bad. >> wonder what companies will be thinking back to the schedule of the ipos, whether a debt default and the subsequent volatility that we see leading up to it and after the fact a broader impact on ipos. >> right. some companies are planning to price tuesday and wednesday of this week. you can be sure that no one wants to be pricing thursday after market on october 17th. if there's one date circled you can be guaranteed it's going to be volatile, october 17th is that date. people are saying it's business as usual. >> kayla, thank you. let's go to the market flash
12:32 pm
desk for another look at what's moving. >> scott, advanced micro devices to the upside. analysts boosted the stock to a buy rating from neutral. they believe amd is positioned well to capitalize on increased sales of next generation video game consoles. grab a bigger share of the computer market some of which use amd chips. this should finish off the year strong. >> amd. >>? >> i've heard the same story for the last 20 years, each time at lower levels. so, i'm going to wait on the sidelines. it's so tempting at a $4 stock, i say wait on the sidelines. >> no thank you. not only that, in semiconductor, semi cap equipment, those are the places you want to be. they are the beneficiaries. >> i rather bail murphy out of
12:33 pm
micron play. >> down 2%, 3%, maybe buy a new tie instead. >> don't take the thunder out of our debate. >> harsh word from china, deamericanize the world and stop using u.s. dollar. talk to one of jpmorgan's top people in china how dangerous the push could be. full plate of earnings tomorrow. numbers you need to get ahead of the earnings trade. americans take care of business. they always have. they always will. that's why you take charge of your future. your retirement. ♪ ameriprise advisors can help you like they've helped millions of others. listening, planning, working one on one. to help you retire your way... with confidence. that's what ameriprise financial does. that's what they can do with you. ameriprise financial. more within reach.
12:34 pm
peace of mind is important when so we provide it services you bucan rely on. with centurylink as your trusted it partner, you'll experience reliable uptime for the network and services you depend on. multi-layered security solutions keep your information safe, and secure. and responsive dedicated support meets your needs, and eases your mind. centurylink. your link to what's next.
12:35 pm
12:36 pm
welcome back. i'm eamon javers with a potential, new development in the stand-off in washington. senate majority leader harry reid telling reporters he thinks we're getting closer, quote/unquote, to a debt limit and anti-shutdown deal according to associated press. also reporting reid says he hopes to have a fiscal plan by today and hopes to have something to present to president obama at 3:00 p.m. when all of the leaders bicameral leaders, democrats and republicans, get together with the president at the white house at 3:00 today. that represents some incremental progress here, possibly depends what's in that plan.
12:37 pm
we don't have any details for you on exactly that yet. we'll have to wait and see. as of now, harry reid says he's going to present something to the president, whether it's something the republicans go along with though is another question. back to you. >> real story whatever's presented to the present, once ultimately presented to the house, that's where the big deal is. >> yeah. the house and the senate are on different pages and republicans in both chambers are on different pages. the question is whether house leaders go for the deal. john boehner will be in the meeting with the president at 3:00. you know, will he sign off on it, will it be something he can agree to? it's a big open question as of now. >> thanks so much. markets are moving, of course, on that news and expectation and hopes really that a deal is being -- will be reached. s&p as you saw quickly there was back at 1700. nasdaq positive. dow off its best levels and working towards the flatline. citi expected to report earnings tomorrow before the opening bell. hours left to trade ahead of the
12:38 pm
report. should you be a buyer or seller? murphy's the bull. josh is the bear. make your case. >> you have citi group here on the 47, 48 range and it's a great place to buy the stock. the stock's trading in a tight range between call it 48 up to 53. i think the main fundamental case on citi the new ceo, michael core bit. look at what he's done for shareholders and what what he's talked about doing, it's a different regime than when pandit was involved. >> right now, citi's in china building branches. if you want to play international growth in the banking sector, citiness the best way to do it. if you look at citi now, if any part of it is spun off, broken, it's high 60s. >> i would say that bull case is a combination of a stale thesis, number one, number two, you know, it's a hope that something might happen on the restructuring side.
12:39 pm
i agree, mike, that is bull, but it's not happening now. focus on what is happening. this stock three times failed at 53. that's now a daunting resistance level. until it can close above that level i don't know why you want to be in it. in addition, it's not even cheap. it's 16 times earnings, that's a 60% premium over its five-year average and in the meantime, return on equity's lower than jpmorgan, wells fargo been. >> you look at the stock in the 48 range, if you can get it from 48 to 53, i'll buy at 48 and sell to 53 all day long. >> relative to the market, it's going underperform and there are better places for the capital. >> if you look at china -- >> corbat named new ceo. more than priced, four years of upside pulled forward in the first six months of the year on the news. >> the stock having technical support here and rallying higher isn't a stale thesis. >> international bank for 25
12:40 pm
years. >> it's not factually trud. >> international bank for as long as i've ban live. i don't see how opening branchs in china changes the fact you're paying above market multiple and above sector multiple for undergrowth. >> you don't see growth for citi in china? >> i'm sure they'll manage to grow there, shrink elsewhere. it's too big. love to see a spin-off but it's not happening. >> a lot of the bulls give you a price target in mid-70s. >> let's talk to one of the bulls and find out what they think. steve weiss? >> tend be impartial. i'm going to say this i literally bought more stock at $48.80, interpret that any way you want. >> stephanie link? >> margin upside, roe upside, restructuring upside. i thought jpmorgan's quarter was better than expected the core business at jpmorgan is pretty good and i think that bodes well for citi group. >> by the way, it's a good thing they've been in the
12:41 pm
international business as long as josh has been alive you want the firm business, that roots, you want roots, experience. i actually hope that they have been in the international markets for as long as you've been alive, scott. >> it's going to be sad when this stock gets turned back in the low 50s, once again. you'll be buying it 48. >> tweet us. use #bull or #bear. we'll give you results at the end of the show. make sure to tune into fast money 5:00 p.m., richard kovacevich will discuss the dysfunction and more. wells reporting earnings last week to to help kick off earnings season. china stirring up a good one over the weekend on the u.s.' role in the global economy. china's official news agency calling for deamericanized world calling our nation hypocritical with a dysfunctional government.
12:42 pm
how investors should be reacting. welcome back. >> thank you. >> how should we be thinking about this today? >> china's frustrated at dysfunction in washington, d.c. because china is single largest holder of u.s. treasuries as we all know, china has 3.5 trillion u.s. in foreign exchange reserves which 1.3 trillion is invested in u.s. government debt. so all of this talk of debt ceilinging government shutdown put damper on china sentiment towards the u.s. across the asia pacific region, japan, other countries, are also large shareholders, large holders of u.s. treasuries. so the default talk actually is upsetting to a lot of the asian countries. >> sure. i'm wondering, what point sentiment and negative sentiment turn into actual action, right? they stop buying as many treasuries. >> that's right. in terms of action, i think it's very difficult for china to diversify outside u.s. treasuries in the near term
12:43 pm
because the amount of holdings is so huge. on the other hand chinese currency beginning to gain more international prominence. china's international -- china's currency the ninth most traded currency in the world now. 15% of chinese trade beginning to be settled in the rmb. more and more bilateral trade is beginning to be settling in the rmb rather than the u.s. dollar. i think the situation in the u.s. is actually going to expedite the internationalization of the chinese currency. >> so because you serve as an adviser to institutions seeking toen vest overseas, what are you telling people about putting their money into the u.s.? are you advising against it? >> in the longer term the u.s. capital market remains the largest, the most liquid, the most regulated market in the world. near-term situation shouldn't deter people's investments in the u.s. market in the longer
12:44 pm
term. in the short term, of course, lots of uncertainties. >> it's josh brown. we seem to always get conflicting data points, the bulls say china's buying gold, the bears will say china's selling gold. could you give us something close to a straight answer? what is china think about gold and what is it actually doing? >> you know the goal market is very intriguing. the chinese market is a single largest buyer of gold having surpassed india. the chinese consumers, retail buyers are absolutely infatuated with gold. we've seen them coming into the market whenever gold prices dipped below 1300 an ounce. now the other side, which is a bit of a mystery, is what the chinese central bank is doing. as we said, china's central bank holds some 1.3 trillion of u.s. treasuries. they have 3.5 trillion of reserves. a small percentage of that is in
12:45 pm
gold. i think there's great potential for the chinese foreign exchange to purchase for gold. one hand you have retail investor buying more gold, jewelry, for investment purposes you also have the chinese central bank potentially buying more gold. i think this helps support gold prices in the future. >> great to have your insights today. thanks so much. what do we think of this ratcheted up rhetoric? >> i think if the people in washington are listening at all this has be to a positive for individuals, like ourselves, because if you read what came out of china, they have to be thinking, we have to get a deal on the table now. it's embarrassing. them saying we need to deamericanize the entire world. well, that's what people view -- that's -- the view people have of our country right now. so if washington, if they're listening, they need to get some sort of agreement in place and go back as the lead country in
12:46 pm
the world. >> this noise different than p&g telling colgate our products are better. china wants all trade to go through them any shot they can take to the u.s., they're going to. i'd say business as usual. u.s. still the place to be. >> all right. coming up tomorrow, huge day for earnings. going to help you get ahead of the numbers after the break. and then you asked for it, tweet us. let us know what trades you're looking at. we'll break them down. [ woman ] if you have the audacity to believe
12:47 pm
your financial advisor should focus on your long-term goals, not their short-term agenda. [ woman ] if you have the nerve to believe that cookie cutters should be for cookies, not your investment strategy. if you believe in the sheer brilliance of a simple explanation. [ male announcer ] join the nearly 7 million investors who think like you do: face time and think time make a difference.
12:48 pm
join us. [ male announcer ] at edward jones, it's how we make sense of investing. [ male announcer ] at edward jones, maestro of project management. baron of the build-out. you need a permit... to be this awesome. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro.
12:49 pm
coming up on "power lunch," very busy hour ahead. netflix shares soaring today. the video streaming giant looking to hook up with cable. does it help or hurt to partner up with rivals. big analyst calls today, are they the right ones? we'll analyze the analyst. putting a face on the government shutdown. the owner of a big catering company in d.c. lost more than $200,000 in work since the shutdown. she has had to furlough dozens of her employees. back to you.
12:50 pm
>> big names reporting earnings tomorrow, including dow components intel, j&j, coca-cola. take our positions with dom. >> talk about the big names. close to 70 companies in the s&p reporting earnings next week. talk about the big once. first of all, johnson & johnson has two big units, consumer products and drugs. the growth rates for both are different. the drug side may be higher than consumer products. coca-cola considered by many investors as a pure play on bernlgs, and pepsico, that's going to be a big one. where is the growth around the world, in merging markets or the growth pattern there. the big one i'm watching is kind of a technology name. look at some of these big names like an intel or a yahoo!. intel is all about the secular decline in pcs, hasn't done well, people are not buying as many. using tablets a lot more. are they doing something positive with regard to getting back in the mobile pc environment. that's going to be a huge thing and yahoo! of course it's marisa
12:51 pm
mayer, her turnaround plan. this is the latest data point in whether or not it's succeeding. >> once you get past the it's marisa mayer, stay it's the earnings, the fundamentals s the real things you can hang on when trying to decide whether this stock should be a buy or not. >> of course. that's going to be the real key. you talk about all these companies but they're all mini cross sections of small micro xik stories in the economy and that's why a lot of traders are keying in on these names because some like yahoo! have had a great run. >> we debated j&j last week. i don't remember if anybody in the desk was involved but what do we think of that stock ahead of the numbers. >> i was bearish. stephanie is close to it and she wants to talk. >> we own it. going to talk about another stock. we own it but not so much for earnings, but more because i think that there's something they can do to break up this company and they've already indicated they might sell out their diagnostics business.
12:52 pm
we don't own a lot of the staple stocks if you will or the real defensive stocks, but this one i think has a catalyst rich story to it and in addition, their pipeline is less mature than some of their competitors. >> you talk about earnings growth and for johnson & johnson, a stock catalyst that's not earnings related it's a different story than we're going to look at some of these companies that are doing well in an environment. >> one quick thought on intel. >> i wouldn't short it. almost a 4% yield but until revenues grow no reason to be in this long. >> josh brown, our traders are quick but not always right. josh told us how great this stock was in august. but it is way down since then. find out if he still likes it something up next. [ male announcer ] once, there was a man who found a magic seashell. it told him what was happening on the trading floor in real time.
12:53 pm
♪ the shell brought him great fame. ♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade.
12:54 pm
12:55 pm
shutdown. welcome back. our traders are quick but not always right. in august josh made a bullish call on exone. take a listen. >> they're going into aerospace, going into industrial companies, so ford is a customer, boeing is a customer, cat ter pilar. you need to start thinking about the larger-scale, 3-d game and this is the company you can take advantage of. >> we're talking 3d printing. the stock down 26% since then. i'm still reminded, too, glenn is sitting here from light street capital, who really said
12:56 pm
that 3d printing almost across the board was a joke. what do you think now? >> he will be wrong and everything that i said fundamentally stands. i'm wrong on the stock for the simple reason that two days after i said something positively about it, the company dropped a huge secondary which is always a danger with the emerging growth companies. they became public in february and nailed us with a secondary. insiders sold too. the street was upset, sold it off. that being said, it's up 17% in the last ten trading days. this is a very volatile stock. if you can't hand al 20% swing probably not the kind of thing you should be involved with. i think the prospects for 3d printing are huge. i'm not in this one, i'm in triple d and strat tis which are the two bigger names in the group. >> final trades after this quick break. we'll let you know who won the debate as well.
12:57 pm
the ocean gets warmer. the peruvian anchovy harvest suffers. it raises the price of fishmeal, cattle feed and beef. bny mellon turns insights like these into powerful investment strategies. for a university endowment. it funds a marine biologist... who studies the peruvian anchovy.
12:58 pm
invested in the world. bny mellon. with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. ♪ [ coughs, sneezes ]
12:59 pm
i have a big meeting when we land, but i am so stuffed up, i can't rest. [ male announcer ] nyquil cold and flu liquid gels don't unstuff your nose. they don't? alka seltzer plus night fights your worst cold symptoms, plus has a decongestant. [ inhales deeply ] oh. what a relief it is. all right. the people have spoken and you said mike murphy won our debate.
1:00 pm
>> mazel. >> sorry, josh. >> final trades, murph, you're off. >> buy ip, international paper. >> stephanie. >> i like discover financial. >> josh brown? >> when bonds open tomorrow they will be down. >> follow me on twitter. power starts right now. >> "halftime" is over. "power lunch" and the second half of the trading day starts right now. all right. they say they're optimistic. they say they may be closer to a deal, but what if there is no deal by deadline day? what does it mean for your money, stocks, housing, fixed income assets? the answers not terribly appealing. we will examine them. remember, rise above new bipartisan meetings are set for today in about two hours at the white house. the congressional leaders and the president will get together. but are we so close to the deadline and so many americans are so angry, we didn't have to go very far

14 Views

info Stream Only

Uploaded by TV Archive on